We are sharing a statement regarding today’s SEC’s decision to allow two shareholder proposals filed at AmerisourceBergen related to the company’s distribution of opioids to be voted on at the company’s annual meeting. While the company sought to have the proposals omitted from the company proxy, the SEC decided that the business risks associated with the opioid epidemic constitute a significant social policy issue and is allowing the proposals to proceed to a vote.

Press release from the ICCC below

SEC to AmerisourceBergen: Let Shareholders Vote on

Board Accountability for Opioid Business Risks, Disclosure of Clawbacks

Detroit, Michigan (January 17, 2018)—The staff of the U.S. Securities and Exchange Commission’s (SEC’s) Division of Corporation Finance in decisions dated January 11, 2018 denied efforts by pharmaceutical distributor AmerisourceBergen (ABC) to block shareholders from voting on two proposals.

The first proposal asks for greater transparency on measures the company has adopted to manage financial and reputational risks associated with the U.S. opioid epidemic. The second proposal asks for annual disclosure of whether the board clawbacked or recouped incentive compensation from any senior executive due to misconduct.

As a result of the SEC’s decision, the proposals will appear in AmerisourceBergen’s proxy statement for its 2018 annual shareholder meeting. The first proposal on board accountability is submitted by the Sisters of St. Francis of Philadelphia, Trinity Health, JLens Investor Network and Missionary Oblates OIP Investment Trust, the second proposal on the disclosure of the use of the clawback is submitted by the UAW Retiree Medical Benefits Trust and the Connecticut Retirement Plans and Trust Funds.

The AmerisourceBergen proposal is part of a broad corporate engagement initiative undertaken by the Investors for Opioid Accountability (IOA), a coalition of 40 institutional investors with $1.4 trillion in assets co-led by Mercy Investment Services and the UAW Retiree Medical Benefits Trust.

The IOA released the following statement following the SEC’s decisions:

“By rejecting AmerisourceBergen’s request and allowing shareholders to consider our proposal on board accountability on its merits, the SEC is recognizing that the opioid epidemic is a significant policy issue with a real impact on investors. We commend SEC’s staff for giving investors a seat at the table and recognizing that shareholders should be allowed to seek information about how companies are responding to the business risks associated with the opioid epidemic.

The IOA also commends the SEC staff for recognizing that shareholders should have information about whether a board has decided to clawback or recoup executive pay for compliance failures. We believe that misconduct clawbacks are powerful tools in setting a tone at the top, signaling an ethical and compliant culture. Without disclosure of its use, investors have no idea if the board is holding individuals responsible for violations of its code of conduct or laws and regulations.”

AmerisourceBergen, the nation’s third largest drug distributor, paid $16 million in a settlement with the Attorney General of West Virginia for failure to provide effective controls and procedures related to the diversion of controlled substances, including opioids, and related matters. As part of a multi-state investigation, 41 states’ attorneys general have requested documents from three opioid distributors, including AmerisourceBergen, to determine if distributors have engaged in unlawful practices in the distribution of opioids.

Copies of the SEC responses to the proposals are available at:

https://www.sec.gov/divisions/corpfin/cf-noaction/2018_14a-8.shtml

Investors for Opioid Accountability (IOA)

The Investors for Opioid Accountably (IOA) was established in July 2017 out of heightened concerns that opioid company risks may both threaten shareholder value and have profound long-term implications for the economy and society. The IOA, a diverse coalition of 40 treasurers and comptrollers, asset managers, faith-based, public and labor finds with over $1.4 trillion in assets, is filing multiple shareholder proposals on board oversight of business risks related to opioids at opioid distributors and manufacturers.

IOA is asking the independent directors of the boards of these companies to investigate how they are responding to increasing business and reputational risks related to opioids. IOA believes that good corporate governance practices that traditionally serve as risk mitigators are critical to implement going forward. Such provisions aim to increase board accountability through strengthened independent board leadership and compensation policies to deter misconduct.
Members of the Investors for Opioid Accountability

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